September has been a very active month for cryptocurrencies, as prices have seemed to be soaring rapidly in both directions. Regulation seems to have been moving at a slightly slower pace which is typical, and some big fortune 500 companies have announced plans to develop blockchain experiments.
Austria and Ethereum
On September 25th Kleinezeitung announced that the Austrian government will be using the Ethereum blockchain to facilitate the opening of over $1,000,000,000 worth of purchasable government bonds. The Oesterreichische Kontrollbank or OeKB bank plans on opening this transaction. This news is very important because it shows the interest in blockchain technology as financial instruments being used by top global banks. In order to grow the advancement of cryptocurrency, institutions need to be adopting the technology and so this is certainly a good step in the right direction.
Wall street Journal Study
On September 28th the Wall street Journal conducted a study which found that over $88,000,000 of illegal funds have been exchanged through cryptocurrency exchanges. The Wall Street Journal conducted their study by looking at over two thousand “blacklisted” addresses and then following the links between the transactions. There are a number of different problems that could arise from this experiment though, one being the purchase of legal goods. If a hacker has stolen 1 BTC and then sends it to a vendor which in return sends the coin to an exchange after sending the product/service to the hacker. The money is not being funneled or hidden using an exchange, but rather being traded legally at that point. So the extent to which the coins are used is not clearly defined. Using exchanges to facilitate illegal transactions has been proven to be minimal, with regulatory laws such as the KYC/AML. At oodlebit we take the regulatory laws very seriously and you can check out our policies and procedures on our website.
Regulatory Clarity needed
CNBC reported that members of the United States Congress are asking for more clarity around cryptocurrency regulatory practices/rules. These regulatory clarifications are not simply aimed at Bitcoin, but all cryptocurrency as Congress has identified the practice of ICO’s and other forms of cryptocurrency coins/tokens. Different government entities classify bitcoin and other cryptocurrencies differently, like the IRS, CTF, CFTC and SEC all have different ideas. This puts businesses and customers wondering what will actually happen to cryptocurrencies from a regulatory state. It is good that some sort of regulatory urgency coming from Congress at trying to understand the exact classification of cryptocurrency since it is damaging everyone who is involved.